Why is Fortune the relevant list? Why not market cap, which also happens to correlate with net income, which means more cash to spend on political influence?
Mostly only pharmaceutical healthcare in the upper tiers of that, but these businesses still have market caps and net incomes literally one or two orders of magnitude separating them. Grouping top 10, 50, and 500 makes no sense.
How educated is it if one doesn’t know Bayer bought Monsanto 8 years ago, and simple searches show Bayer has lost a ton of money during the last 8 years, while John Deere has earned quite a bit.
Unless the video is about an extraordinary natural phenomenon that can be seen, video (and audio) is strictly inferior to text for communicating information.
>Just yesterday there was an article that summarized oil price drop 40% from when the war cooled down, but prize at the pump went down only 12%. The big oil explains this that people will buy gas anyways, so why lowering the price?
Because the gas station across the street will sell it for less. Because a different refinery will sell it to the gas station for less. Gas prices are the pump and oil prices in the commodities market don’t move in perfect unison. But they do move eventually.
Wild how some ragebait “article” can erase people’s memory of gas prices going down. Not to mention that gas at the pump has taxes/labor applied to it that can also change.
How do you know the local independent pet store is not buying their inventory from a business with directors and shareholders sitting on beaches in French Polynesia?
It is more entertaining if the rules are the same for everyone. It would be fine if the official rule is red card disqualifies from next game until a dignitary calls. Or red card consequences can be modified for the top or most popular player on a team.
Those are urban areas with a dense grouping of relatively small and lower priced construction. The Alex Murrell link has pictures of dense groupings of enormous buildings with very high priced construction.
Markets only function if sellers (and buyers) have accurate and transparent information about prices and the goods and services. There is no force of the market if it takes too much effort to distinguish what is and isn’t human.
The generic city one makes no sense. Does the author want each city to invent a new physics? Not only are there quite a few different looking buildings in each of the cities, but given the constraints of not have unlimited funds, surely one can understand that many columns of steel, concrete, and glass will look like columns of steel, concrete, and glass from afar.
DSCR is calculated at least once per year. I don’t know what pro forma could mean here, it’s purely a cash flow calculation. The money came in, or it didn’t.
> The claim isn't that they can keep this up forever, it just needs to last another quarter, every quarter.
I don’t understand what this means, or what is being “played”, the lenders all have a near real time view into the business.
I do not see why I should reconsider. My intention was to point out it is not just “AI companies” that have the following directive, they just couch it in finding the lowest price for something.
>an explicit goal it to make profit by replacing or reducing the need for human staff. There tends to be extremely little attention paid to the social ramifications of this:
>For example, at every AI company right now, an explicit goal it to make profit by replacing or reducing the need for human staff.
Almost everyone has an explicit goal of spending less money for equivalent goods and services. People prefer to stores that prioritize lowering prices over paying for more staff.
>Somehow we've made it the vast majority of human history without it.
That isn’t a high bar. It’s only recently that the greater accessibility of cameras and recording devices that we get insight into just how much abuse there is, such as that experienced by women or by police towards minorities.
I don’t know what “under employed real estate agents” means, but the appraiser that the lender cares about is in no way associated with the real estate agents. The lender picks the appraiser (a licensed professional usually working as an independent contractor) who submits a report to the lender, who then determines whether or not they want to use it.
Asking price also has nothing to do with market value, so offering $200k more over asking would be irrelevant to the appraiser. You should have received a report showing recently sold houses similar to the one you were buying and other physical features that justified the appraisal.
There is even an appraisal contingency in most purchase agreements that outline what to do if an appraisal comes in lower than what a buyer offers to pays. Typically, the buyer can exit the purchase and get their earnest money back, or they can put additional money down to cover the gap between the appraisal and the offer price.
> If they sign a lease at a new lower rent it basically triggers a re-check of "can they repay the loan based on their rental income?", which comes back as "no". That trigger _doesn't_ occur if you just leave the building empty, with _no one_ paying rent, because your last mark to market rent was high enough.
Minimum DSCRs have long been used to monitor the current value of a property, and less income is less income.
> It's a shell game that eventually leads to the loan defaulting, but both the bank and the building owner are happy to pretend they can't see the train coming down the tracks at them.
This makes no sense. Why would a lender not want to keep tabs on their investment? What does shell game (a game where someone is intentionally deceived) even mean here?
Residential real estate has a lot of sweetheart terms due to government subsidies, especially in the US. That is why you don’t see 30 year fixed rates anywhere else, and 0% down loans anywhere else.
The DSCR equivalent for residential real estate is debt-to-income ratio. In a free market, it is conceivable that lenders offer lower interest rates for borrowers who periodically prove their DTI is sufficient. That is basically what refinancing is, and what people with adjustable rates mortgages have to do.
> residential real estate is based on tons of pricing effects, and appraisals are much more "feels" than "reals",
If you have looked at a residential real estate appraisal, there is a very real process of gathering comps, evaluating the structure, discounting for wear and tear of major maintenance items such as roof, HVAC, etc. If anything, because residential real estate sales volume is so much higher than commercial, residential is more “reals” than “feels”.
> if you will (how people feel about the area, how they feel about the tower the previous owner added, how they feel about the location, etc).
Who are these “people”? Because if we are talking about appraisers, this should disqualify their license to appraise. Appraisers should be mostly looking at competitive sale prices, per sq ft construction costs of major house components, and other objective criteria. Why else would a lender pay them to evaluate a property?
>Commercial real estate valuations are almost entirely a mathematical formula based on rents, current, whether they're collecting them or no
This is not true. Try calling up a lender and asking to borrow money without showing them cash flow, and they will hang up on you.
> And if the rents drop (e.g., you start renting it at a lower square foot rate) the valuation drops, which can require recollateralization (e.g., unlike your house, the banks require that the loan NEVER be more than 50% LTV or something)
They literally do this, via DSCR. If you stop renting space, your operating income goes down, which causes the DSCR to go down, which triggers a default, which means the lender can negotiate new terms, which could involve the borrower putting up more money, extended loan terms, change in interest rate, anything.
The alternative to a loan with a DSCR is usually a 5 year adjustable rate mortgage, which usually has a higher interest rate and then in 5 years, you still have to use your cash flow to qualify for another loan, so eventually someone will want to see income for the property
> Effective CRE lending policies generally reflect the following for each type of loan or
property:
>• Minimum standards for borrower or project net worth, support provided by guarantees (if
applicable), borrower and guarantor cash flow, and debt-service coverage ratio (DSCR).